It’s insane how many acronyms you hear thrown around in the tech industry, expecting people to know what they mean. Yet there is a method to this abbreviation madness and here’s where we’ll untangle three of the business world’s most repeated acronyms and what they are: ERP vs CRM vs SCM. Already the article seems like a jumbled word puzzle, but things will get better once we get around to defining each one. After that’s taken care of, we’ll start the comparisons and show you how many and which of these three have more to do with your business.
ERP vs CRM vs SCM: Definitions
To understand the differences that are constantly brought up (mostly by mistake!) in the ERP vs CRM vs SCM debates, we’ll first need to look a bit more closely at what each of them is. Now, you probably know about one or more of them — most business owners have heard about CRM software, for example. Even if you know all the definitions, I’d advise you to tag along in this section. I’m going to offer practical, jargon-less definitions in plain English and that can mean new insights.
What is an ERP?
ERP stands for Enterprise Resource Planning. It’s a software that provides a single database for all the business processes of a company. It manages the entire business process, including data collection, processing, reporting, and analysis.
ERP software is used by large companies because it helps them manage their operations more efficiently by providing real-time information about the status of various operations within the company.
Enterprise resource planning (ERP) is an integrated system that automates and integrates the business processes of an organization. It’s a software solution that allows companies to manage their business operations in one place.
ERP can help with supply chain management, human resources, and financial management.
- Supply chain management: ERP helps with supply chain planning by ensuring you have enough products available in the right places at the right time. It also optimizes your inventory levels so you don’t have too much or too little on hand at any given time.
- Human resources: An HR system is integrated into ERP so that employees can review their individual performance metrics and make suggestions for improvement based on those results. This helps ensure that employees are meeting their goals while improving efficiency overall by reducing unnecessary steps between departments/functions within a company’s workflow process within an organization.
- Financial management: An accounting system is also integrated into ERP so all financial transactions are reported accurately across multiple departments/functions within a company’s workflow process within an organization
What is a CRM?
Customer relationship management, or CRM software, is a type of software used by businesses to manage their customers. Companies use CRM software to keep track of all the interactions they have with their customers. This includes how people find out about their business, how often they buy from them, and what types of marketing materials work best for them.
CRMs also help businesses organize information about their current and past customers so that salespeople can better target potential buyers based on what kind of information they have on each person.
What is an SCM
The supply chain management system (SCM) is a software application that helps businesses maintain their supply chain processes. The SCM allows a company to track the movement of raw materials, finished goods, and other materials from suppliers to customers. It’s important for businesses to have an effective method of tracking their supply chains because it allows them to improve efficiency and cut costs.
Supply chain management (SCM) is the process of managing the flow of goods and services from a supplier to a customer. Supply chain software is used to manage this flow, and it can help you plan your supply chain, manage inventory, and track shipments.
For example: If you’re an online retailer that needs to order 2,000 units of product A for delivery on Monday morning at 10 am, SCM software would enable you to see which suppliers have those items in stock so that you can get them delivered on time.
ERP vs CRM vs SCM: Breakdown and Comparisons
Now that we have a working definition of the three software systems, it’s time to get into the actual ERP vs CRM vs SCM debate. I’m going to break things down into three comparisons, and then we can put them back together to get the larger picture.
ERP vs CRM
ERP and CRM are two different terms that stand for different things. ERP is a broader term, but it’s often used to describe CRM—which is more specific.
CRM refers to customer relationship management software that helps companies manage their relationships with customers. The system allows salespeople to keep track of potential customers, monitor their contact history, and track the status of each interaction they have with them (i.e., emailing back and forth).
ERP stands for enterprise resource planning software, which is used by larger organizations (such as those in manufacturing or retail) that need a system for managing all aspects of their businesses—from finances to inventory management—in one place.
If you run an eCommerce business with multiple warehouses or distribution centers (DCs), then using ERP software may be beneficial because it allows you to track all shipping information in one place instead of having separate systems for each DC where orders are processed. For example: Let’s say that 200 orders were placed through your website last week and they need to be shipped out by Friday afternoon at 5 pm; with traditional retail management systems like QuickBooks Enterprise Resource Planning (ERP), there would probably be three different databases associated with these sales transactions—one database per warehouse/DC where products were stored before being shipped out—so figuring out how many units have been shipped versus what remains unshipped could take some time since there’s no central hub for tracking all this data together!
Every Business Needs Both
Both ERP and CRM are important systems for businesses to have. However, they serve different purposes and have some key differences in how they operate. You should think of them as separate tools that work well together, but when used individually can create an integrated business solution.
The purpose of an ERP system is to streamline all aspects of your business (from production to sales to accounting) by gathering data from many sources and making it available in one place. This allows you to see a bigger picture of your company’s operations and make decisions based on information rather than guesswork or gut feeling.
CRMs are designed with a specific purpose: manage customer relationships and interactions across channels including social media, email campaigns, live chat, etc.. They’re generally more specialized than ERPs because they focus specifically on customers; however, this also means that the data collected about each customer can be much more detailed than what an ERP might offer (e.g.: name address phone number email address, etc..).
These two types of software hold their own advantages and disadvantages.
Both ERP and CRM software are important for businesses. But they each hold their own advantages and disadvantages. In terms of focus, ERP is more business-focused, while CRM is more customer-focused.
The main advantage of ERP is that it can be used to manage all aspects of your business—from sales to production to accounting and finance—in one place. This makes it an excellent tool for the overall planning, forecasting, and budgeting for your company’s success long-term.
ERP also allows you to integrate all the pieces of your operations together seamlessly so that everything runs smoothly together in real-time without any manual work on your part or resources from other departments being used up unnecessarily when they should be focused elsewhere within the organization (like marketing).
While there’s no right answer here, it’s always good to know the different options available when it comes to business software. If you’re looking for something that can help with sales and marketing, then an ERP may be best for you. On the other hand, CRM systems are great for managing customer relationships—so if that sounds like something your company needs then go ahead and choose one!
ERP vs SCM
We won’t actually get into this, since it gets more than a little technical, but most of the time, an SCM is a part of a complete ERP system. Basically, SCM is just one of the main features of ERP, which makes it more useful for smaller enterprises or SMBs that don’t need a complete ERP suite of tools. With that said, let’s skip this bit and go on with our ERP vs CRM vs SCM debate —
CRM vs SCM
CRM and SCM are two business acronyms that are sometimes used interchangeably. The truth is, they’re very different. CRM stands for customer relationship management, while SCM stands for the supply chain management.
Both of these systems collect data in order to make their respective areas more efficient and profitable for companies using them. However, each one focuses on a different aspect of your business: CRM is designed to help you sell more products or services by improving your customer relationships through better communication; SCM helps with managing inventory levels across all departments within an organization so that no one runs out of any product at the same time (or worse—has too much).
In short: both systems are used by businesses but have different goals in mind when it comes to gathering information about customers/suppliers/products/shipping costs etcetera…
A CRM solution typically includes a database to store information about leads and customers, along with tools such as email marketing automation software or live chat software that allows businesses to communicate with these leads or customers more effectively.
Supply chain management (SCM) is the process of managing the flow of goods, services, and information from the point of origin to the point of consumption. It encompasses purchasing, production, logistics, inventory, warehousing, and distribution.
In other words, SCM is all about the supply chain—from procurement to delivery.
Supply chain management software allows organizations to improve efficiency by integrating it with their ERP systems; however, there are many other benefits that SCM can offer as well including:
The main difference between CRM and SCM lies in the way each uses data.
- CRM is customer-centric: It aims to improve the relationship between a company and its customers.
- SCM is supply-chain-centric: Its main goal is to manage all aspects of the supply chain, from manufacturing through distribution to sales.
- CRM focuses on managing relationships with customers, while SCM focuses on managing the flow of products through your business processes.
If you’re still unsure whether to use CRM or SCM, there’s one main difference between the two that can help you decide.
CRM is a customer-centric approach to business while SCM is a supply-chain-centric approach. This means that with CRM, your focus will be on individual customers and their needs, whereas in SCM, it’s more about how all of your suppliers and vendors fit together into creating an efficient system.
In other words: If you want to build a great experience for your customers (which is obviously important), then CRM might be the right choice for you. On the other hand, if you want better communication within your supply chain so that everything runs smoothly from start to finish (and yes—this may also improve customer satisfaction), then SCM could be better suited for what you need.
CRM and SCM are both used to manage the relationships between companies and their customers. However, they each focus on different areas of those relationships. CRM is more focused on customer interaction and engagement, while SCM is more focused on logistics.
This difference in focus can be more clearly seen when comparing the two tools to their older counterparts: Customer Relationship Management (CRM) was originally called Sales Force Automation (SFA) and Supply Chain Management (SCM) was originally called Materials Resource Planning (MRP). While CRM can certainly help with supply chain management and SCM can help with sales efforts, in general, they’re better at doing what they were built for—that’s why it’s important to understand which one fits your business best!
It’s important to know the differences between these two terms in order to have a successful business. CRM is more focused on the customer, while SCM is more focused on the supply chain.
CRM focuses on how your company interacts with its customers, such as through sales and marketing efforts. It also involves data gathering and analysis to help you understand what customers are looking for and how they feel about your brand or product. All of this can be used to improve customer service by improving communication between you and your customers, including providing them with personal recommendations based on their preferences.
Meanwhile, SCM focuses primarily on inventory management and logistics—or any other aspect of production that affects how well you can deliver products/services at scale.
Put them together: ERP vs CRM vs SCM
I’m going to use a simple table to make it easier to absorb all the info that you got above. The table shows you the most important differences between the solutions, giving a good general picture of things.
|Solution||Price||Target Company Size||Ease of Use|
Which One Does Your Business Need: ERP vs CRM vs SCM
Looking at that table above, things may seem more or less obvious — you’re a small business owner who doesn’t want to pay a fortune for tools that may or may not help the business. You also don’t want to sink in the time to learn how to work with ERP and SCM solutions and hiring someone just for that may stretch your budget. So, is going with a CRM the right choice? Not necessarily, at least not with your typical, industry-standard CRM. There are a few crucial features and tools that SMBs can use the most, but they’re usually locked in as part of a huge ERP or SCM software, making them expensive and hard to work with. For example, having an inventory management tool is indispensable for a retailer but does that mean they have to shell out for the whole ERP solution? Normally, yes, but that’s what RunSensible is trying to fix.
RunSensible is more than just a CRM. Not only is it an all-in-one marketing and sales software, it also includes some of the vital features of ERPs and SCMs. For example, RunSensible comes with its own Inventory Management, Dynamic Pricing System, Project management, and more tools to help your business grow without going bankrupt on software subscriptions!
Want the Best of All Three Worlds?
Choosing the right stuff from so many different features and tools, let alone the acronyms can be more than a bit challenging. Like most business owners, you may find yourself needing just a small part of an ERP or SCM, with the rest handled by a CRM. Should you consider getting an ERP or SCM system for a few of its features? These are enterprise solutions so unlike a CRM, they are not exactly cheap — that is actually one of the major differences in ERP vs CRM vs SCM.
RunSensible is an all-in-one business and sales software that brings together the tools you really need for your small business to grow, including inventory management, project management, dynamic pricing, as well as all the usual CRM tools like email marketing, invoicing, promotions, and more.
What is the main difference between CRM and SCM?
While CRM is all about customers and sales, SCM helps businesses by making their supply chains manageable and making sure supplies are available on time.
Can I integrare an ERP into my CRM?
Yes, there are different ways you can do that. Some of the more high-end brands actually have all the necessary tools for integrations. Another way is using tools like Zapier to bridge between the apps. Perhaps the best solution is to go for a complete solution like RunSensible, which has lots of extra tools seamlessly integrated into its CRM.
Are ERP software solutions expensive?
Yes, they usually are. Although the question depends on what you consider to be expensive, from a small business owner’s point of view, an ERP comes at a considerable cost. That’s because it’s an enterprise solution mostly used by larger companies.